Budget 2022 Malaysia - What's It All About
What is Budget 2022 Malaysia
For almost two years ago from now, Malaysia has been continuously suffering from the impacts due to COVID-19 and Movement Control Order (MCO) that has been implemented to act as an effective measure against the pandemic. This has unquestionably ravaged the country’s economy as many people or businesses regardless of sectors are forced to close their operations, complying with the restrictions and Standard Operating Procedures (SOPs) imposed by the government for an extended period. As the country is currently on its path of recovery from the pandemic, the economic sector has gradually reopened its gate to businesses at the same time.
Image Source: Ministry of Finance Malaysia
As the vital key to the rebuilding of the economy of Malaysia, Budget 2022 is aimed to act as the catalyst for the three major stages - recovery, resilience and reform. It is strived to ensure that no individuals or businesses will be left behind from the support or assistance provided by the government to promote economic recovery. As a result, Budget 2022 will be focusing to prioritize safeguarding and recovering people's and companies' lives and livelihoods, rebuilding national resiliency, and accelerating post-pandemic changes.
Theme of Budget 2022
"Keluarga Malaysia, Makmur Sejahtera", - Family of Malaysia, Prosperous and Peace.
Budget 2022 Allocation
The total allocation for Budget 2022 is RM332.1 billion - the largest amount ever allocated on record, a 3% of increment compared to Budget 2021, which is RM322.54 billion.
The amount involves:
With the remainder going to unanticipated bills.
Nevertheless, the government estimates a 1.22% decline in revenue, resulting in a 6% deficit (5.4% in 2021).
Malaysia's GDP is expected to increase between 5.5 and 6.5% next year, according to the government;
While Bank Negara forecasted this year's growth to be between 3 and 4% in August.
Under Budget 2022, the direct cash aid program will be enhanced and reintroduced with a brand new title - Bantuan Keluarga Malaysia (BKM). With an allocation of RM8.2 billion, the newly proposed BKM is expected to assist over 9.6 million people, with cash handouts ranging from RM300 to RM2,500:
Image Source: MySumber
The government intends to widen the scope of excise tax to include premix sugary drinks manufactured from chocolate, malt, coffee, and tea in order to promote a healthy lifestyle. According to the Finance Minister, nicotine-based gel or liquid goods for vaping and electronic cigarettes would be subject to an excise charge as well.
The Education Ministry will continue to be allocated with the most funds similar to the past year, with a 4.5% increase. RM52.6 billion will be given to the Ministry of Education and RM14.5 billion for the Ministry of Higher Education. Furthermore, pre-school students will get an RM150 cash handout from the government. A total of RM1 billion will be spent on school renovations and repairs. For Tamil and Chinese vernacular schools, RM120 million has been set aside. According to Tengku Zafrul, this includes RM450 million in help for three million students.
Moreover, the government would grant each teacher with RM100 to purchase instructional materials. Higher education schools will provide free tablet computers to students from B40 families. This program is estimated to help around 600,000 kids. At the same time, the government would continue to provide an RM2,500 tax break on the purchase of mobile phones and PCs.
Last but not least, discounts are offered to repayment of National Higher Education Loan Fund (PTPTN) borrowers as well, starting from Nov 1 to April 30:
The government will launch the JaminKerja job placement programme, which aims to create an estimated 600000 employment opportunities with an allocation of RM4.8 billion.
Besides, through the Social Security Organisation (SOCSO), the government will continue to work to hire people by implementing JaminKerja's wage incentive plan. With a target of 300,000 recruits, the government will subsidize 20% of the pay for the first six months and 30% for the next six months to companies for any new workers that are not actively working, with an earning more than RM1,500 under this program.
JaminKerja will also provide larger subsidies for hiring handicapped people, with 30% for the first six months and 40% for the next six months, with a salary of RM1,200 and above. As of August 2021, the unemployment rate was 4.6%, according to Tengku Zafrul, the program is expected to cut down the unemployment rate to 4%.
Image Source: Jabatan Penerangan WPKL
RM1.1 billion has been set aside for training and upskilling programs for 220,000 trainees, among other things. Other than that, the government is also raising the tax rebate for people who complete reskilling courses from RM1,000 to RM2,000. This tax break is available until 2023.
Budget 2022 allocates RM6.6 billion to the Technical and Vocational Education and Training (TVET) sector. According to Tengku Zafrul, the focus is on satisfying industry demands, and an additional RM200 million has been set up for joint venture programs with businesses.
Image Source: Jabatan Penerangan WPKL
Through different projects, a total of RM11.4 billion would be provided to empower the bumiputra community. RM6.6 billion for education facilities in Mara, UiTM, and Yayasan Peneraju, and RM4.8 billion for different capacity building and business finance programs are among them.
RM274 million has been set aside for subsidies, educational help, and welfare aid for the Orang Asli group, which would benefit almost 200,000 individuals.
A total of RM200 million has been set aside for the Chinese community, including funds for the renovation of Chinese new towns and financing initiatives for small and medium businesses (SMEs).
Under the Indian Entrepreneurs Development Scheme, RM145 million has been made aside for the Indian community, including for the execution of programs to develop the community's social economy through Tekun Nasional, the national Entrepreneurial Group Economic Fund.
All publicly traded firms will be required to nominate at least one woman to their board of directors, according to the government. Tengku Zafrul also stated that RM5 million will be provided to the Women Leadership Foundation in order to promote female involvement in the economy.
Young women in the B40 category will receive free self-hygiene kits on a monthly basis, benefiting approximately 130,000 youths across the country. Tengku Zafrul went on to say that RM11 million would be set aside to subsidize mammograms and cervical exams.
The government has promised to offer RM900 in apprenticeship subsidies, up from RM800 before.
The government, on the other hand, recommends that companies pay a matching allowance. The government is preparing a RM150 million loan for young businesses.
Budget 2022 would provide RM20 million to support the growth of e-sports. This includes RM5 million to establish a drone sports excellence center in Malaysia. Besides, the minister declares that e-sports revenues would be tax-free after complimenting Malaysians on their achievement at the just finished DOTA 2 competition in Romania where foreign earnings are normally tax-free.
For six months, until June 30, 2022, the government would prolong the 100% sales tax exemption on passenger vehicles (CKD, domestically manufactured) and the 50% sales tax exemption on completely built-up (CBU, imported automobiles) including MPVs and SUVs.
The exception was enacted by the government in 2020 in order to boost sales in the car industry, which had been hit hard by the Covid-19 epidemic.
A total of RM1.5 billion has been set aside for the continuation of low-cost housing projects. Another RM2 billion has been set aside for a housing credit guarantee plan to assist people who do not have a steady income in purchasing a home.
For properties sold from the sixth year onwards, Tengku Zafrul stated the government will no longer levy the real property gains tax (RPGT) on Malaysians, permanent residents, and corporations who sell their real estate holdings.
In light of the Covid-19 outbreak, the government will provide financial assistance to businesses that desire to enhance seating or air circulation with the planned maximum subsidy of RM300,000. At the same time, companies that register under the Safe@Work program will receive an RM50,000 tax break for providing safe housing for their employees.
Micro, small, and medium-sized businesses can postpone payments for up to six months until June 30, 2022.
Tax relief will be offered to landlords who provide rental concessions to enterprises.
Unabsorbed company losses from the preceding seven years can be carried forward for a maximum of ten years.
The government will provide subsidies of RM100 million to the aerospace industry. This, however, is only available to bumiputera candidates.
The government would also award a grant of RM100 million to businesses that wish to automate their operations.
Another RM423 million in research and development awards would be offered for enterprises.
The tourist industry has received a total of RM1.6 billion. The Penjana Tourist Financing and BPMB Rehabilitation Scheme will get RM600 million, with RM85 million going to a three-month special support program for nearly 20,000 tourism companies.
Tengku Zafrul also announced an RM30 million allocation for matching funds for the rehabilitation of affordable hotels and homestays.
The RM1,000 tax credit would be extended until 2022 to encourage domestic tourism.
In order to trade carbon credits, Bursa Malaysia would administer a "voluntary carbon market."
Electric vehicles (EVs) will be practically tax-free since they will be exempt from import, excise, and sales taxes. EV owners would also receive an RM2,500 tax break.
The government will use its Suku Kelestarian (sustainable bonds) to generate extra RM10 billion for social and environmental initiatives.
The government intends to implement a Fiscal Responsibility Act to strengthen the country's fiscal management's accountability and transparency.
According to Tengku Zafrul, the law will be ready next year.
In collaboration with the World Bank, the government plans to execute a "public expenditure review" to assure the efficiency and efficacy of public spending on the delivery system.
"This will ensure that every ringgit spent on the rakyat is well spent," the minister adds.
From January 1, foreign income received in Malaysia will be taxed.
Sales tax will be applied on low-value products purchased from abroad that are sold online and shipped into the country by airmail. In addition, online marketplace delivery services will be subject to a service tax. From January 1, 2023, all enterprises bidding on government contracts must receive a compliance certificate from the Inland Revenue Board.
For the year 2022, the government would impose a one-time company tax of 33% on any revenue over RM100 million.
"Cukai makmur" is the name given to this tax (prosperity tax). The company tax rate for revenues under RM100 million stays at 24%.
The Defence Ministry will receive RM16 billion, of which RM1.6 billion will be used to enhance the preparedness of the Armed Forces' principal assets. This budget also includes RM14 million to replace parachutes, closed-circuit diving equipment, and boats for Naval Special Forces (Paskal) and Air Force Special Forces (Paskau).
The National Sports Council (NSC) will get a RM10 million grant to enhance the national paralympic squad. This aims to improve training regimens and organize leagues for several sports in preparation for the 2024 Paralympic Games in Paris. A total of RM158 million would be spent to rebuild, improve, and construct athletic facilities around the country while another RM50 million would be provided to encourage individuals to maintain their active lifestyles.
A RM300 million budget has been set aside to put RM150 into the e-Wallets of students aged 18 to 20 who are enrolled in higher education institutions.
For the 1.3 million governmental personnel in Grade 56 and lower, the government has announced an RM700 incentive, nevertheless, an additional 1 million retirees will earn RM350.
Tengku Zafrul concludes his remarks by reminding MPs that the fight against Covid-19 is far from done in Malaysia.
"People continue to suffer. Our frontline soldiers have yet to return home, and the fight continues to rage "he continues.
The budget address was not welcomed with jeers from the opposition for the second year in a row.
Check Out Other Post
Penang: 3A-1-13, Straits Quay, Jalan Seri Tanjung Pinang, 10470 Tanjung Tokong, Penang, Malaysia
Kuala Lumpur: 23-5, Menara Bangkok Bank, Berjaya Central Park, Jalan Ampang, 50450 Kuala Lumpur
Contact us anytime! We will get back to you soonest possible
Convenient accounting outsource for your company and business!
3A-1-13, Straits Quay, Jalan Seri Tanjung Pinang, 10470 Tanjung Tokong, Penang, Malaysia
23-5, Menara Bangkok Bank, Berjaya Central Park, Jalan Ampang, 50450 Kuala Lumpur
iCount | All rights reserved | 2021
Feel free to write, call, and visit us. We really love to communicate with our clients
Feel free to write, call, and visit us. We really love to communicate with our clients
Join our referral program & get discounts up to 20%
Invite more friends to achieve milestone
Enter your email to receive our newsletter, so you can stay in the loop with our latest promos.